The Irish Co-operative Organisation Society (ICOS) has called on the government to review the tax treatment of co-op shares in certain circumstances.
In its pre-budget submission, the umbrella body for the Irish co-operative movement claimed that such changes would support the workings of co-ops with minimal impact on the public finances.
ICOS said that co-op shares should be classified as qualifying assets when calculating Capital Acquisitions Tax (CAT) agricultural relief and Capital Gains Tax (CGT) retirement relief on the transfer of the agricultural property.
The group said that co-op shares should be eligible for appropriate capital allowances similar to that for milk quota previously.
ICOS called for financial support for smaller co-ops, by means of a ‘compliance support voucher’, to help cover the costs of carrying out annual audits.
The submission also called on the government to urgently complete the review of co-operative legislation
“The current Industrial and Provident Societies (IPS) legislation from 1893 is widely acknowledged to be no longer fit for purpose in a number of areas,” ICOS commented.
The group noted that the agri-food sector remains “greatly exposed” to the threat of Brexit and the inflation and supply chain issues due to the Covid-19 pandemic and the Russian invasion of Ukraine.
It called on the government to set out a clear strategy in Budget 2023 to protect businesses such as the dairy processing industry from unsustainable increases in natural gas and fertiliser prices.
“It is not an exaggeration to suggest that we could face a catastrophic reduction in productivity and profitability at farm level should the predictions of gas shortages become reality over this winter period,” ICOS outlined.
It added that any measures to support farmers against the rise in fertiliser prices should not discriminate against the dairy sector.
The group called for the rollout of a new soil fertility programme and the continuation of the multi-species sward and red clover schemes.
Capital allowances were sought for low emissions slurry spreading (LESS) equipment and investments in slurry storage and soiled water capacity, along with support for the upscaling of milk recording services.
ICOS renewed its call for taxation measures to help farmers manage market volatility whereby a “rainy day” fund could be used to hold profits for use when returns are weaker.
As part of bioeconomy measures, the government was asked to support demonstration sites for co-op-owned regional biorefineries co-located with anaerobic digesters (AD).
ICOS said that appropriate and viable feed-in tariffs and longer supply contracts will encourage more farmers and co-operatives to produce both renewable gas and solar energy.